The document discusses Cisco's 'Lean Forward' initiative aimed at enhancing profitable growth and sales acceleration by extending lean manufacturing principles into its distribution channels. It identifies challenges such as high operating costs and unpredictable lead times, and outlines a collaborative framework involving supply chain management and various stakeholders. Key benefits include improved supply chain visibility, streamlined processes, and mutual profitability for Cisco and its distributors.

1. Lean ForwardCase Study at CiscoMudit Agarwal – IT Eng/ Solution Architect

2. AgendaWhat is Lean Forward Problem StatementBusiness VisionLean Forward CharterFramework/ Solutions/ Key MetricsDistributor’s VoiceSolution BenefitsChallengesClosing and Q&A

3. AMR Research Ranked Cisco 8th in the 2008 Supply Chain Top 25, Citing Lean ForwardFirst time in Top 10 (April 2008)

4. Ranked on innovation in supply chain design / management, operational excellence, and contribution to outstanding business results What is Lean ForwardGlobal initiative to power profitable Growth and Sales acceleration for Cisco and its Distributors Extending Principles of Lean Manufacturing into the ChannelExtending Supply Chain to Cisco’s Distribution PartnersLean Forward is organized into 4 tracks - D=S, Physical Inventory Optimization, Landed Costs, and Improved ProductivityDriving profitable growth through partnerships

5. Problem StatementHigher Distributor/Reseller operating-cost and working capitalOverstocks due to unpredictable lead timesProject-based orders that must be delivered complete before releasing to resellerInefficient supply chain fulfillmentDistributor purchase price misaligned with market price

7. Business VisionTransforming the Customer Experience with a streamlined, highly integrated global supply chain, driving profitable growth and sales acceleration for Cisco and its Distribution Partners

8. 46Extending Supply Chain visibility into Distribution has highlighted new opportunities for improvementDisti Operating CostDisti Working CapitalCisco Reseller DevelopmentCisco Demand Generation“Right” Cisco InventoryDistributorsOur DockDisti Cash Flow Reinvestment…focused on driving profitable growth for Cisco and our DistributorsRevenue and Profit Growth for Cisco and DistributorsLean Forward Charter: Driving Profitable Growth for Cisco and our Distribution PartnersLean Forward is a collaboration across: Supply Chain Mgmt

9. WW Distribution

10. Cisco Capital

11. Export Compliance

12. other organizations…

13. High Level Solution Detail Demand=Supply (D=S)Distribution Partner overstocks due to unpredictable lead times

14. Balance Demand – supply equation at SKU level

15. Freeing Working Capital for reinvestment

16. Actual POS serves as demand signal

17. Supply driven from demand input Merge In Transit (MIT)Project-based orders that must be delivered complete before releasing to reseller

18. Reduce the lag time between ship sets

19. Release to ship and invoice at the delivery Key MetricsThe Financial Metrics include:Working Capital freed up Operating Cost Reductions Savings Reinvestments Incremental Sales Generation The Operational Metrics include: Lead Time Fill Rates Inventory Weeks of Supply Stock rotation percents Daily Rebate Claims Rejections

20. Global Distributors’ Voice“Whether it be forecasting or demand or fulfillment or configuration …Lean Forward causes us to look at those opportunities together in a different way.”

21. Lean Forward is “an opportunity to improve profitability …improve return on capital … and to reinvest that into our partnership.”Solution BenefitsLean Forward provides "one face" to distributors worldwide within Cisco’s global supply chainEnables supply chain control and visibilityImproves the customer experience of Cisco productsCloser partnership for solving supply chain issuesInvolves mutual reinvestment - resulting in mutual profitable growth

22. ChallengesEvolving Business ModelsShort Time to MarketConsistent Terms and Condition across multiple Partners

23. Q and A